Europe Must Move Now With Greater Support For Dairy Sector – O’Neill Tells Assembly

Agriculture Minister Michelle O’Neill has urged the European Agricultural Commission to offer greater and immediate support for the north’s dairy sector, warning continued delays would see many farmers go out of business.

Speaking in the Assembly Minister O’Neill told MLA’s that whilst she was optimistic for the future she remains very concerned about the impact of the current crisis on dairy farmers and their families.

Commenting on the recent measures announced at the Special Agriculture Meeting in Brussels on September 7, Minister O’Neill said: “The current dairy crisis, caused largely by global factors, is outside our control. We need effective and immediate EU action to address the very damaging consequences of this situation – any further delay will see many farmers go out of business.

“There appears to be little new thinking in the recent package announced by the Commission, which falls short of the immediate meaningful action I have been pushing for. I have real concerns that €500million will not go very far across 28 Member States and that the funding we will eventually receive is not targeted at our unique and specific needs in the north. I have therefore written to Commissioner Hogan seeking urgent clarification on how our Member State envelope will support our farmers.

“Our local industry representatives throughout the dairy supply chain have called for a significant increase in the intervention price and I have strenuously supported that call. I believe we now need to examine the intervention system and assess whether it adequately fulfils the role of providing an effective safety net, especially given that the current intervention rate was set 12 years ago. I will continue to urge the Commission to use the full range of tools at its disposal.”

The Minister, who will update members of the Agricultural Committee today on the issue, paid tribute to the dairy sector for the particularly important contribution it makes to the local economy.

“In 2014 it accounted for 41% of gross agricultural output, whereas the EU equivalent figure is 15%. It provides employment on over 3,000 farms and has a gross turnover of about £1billion, employing over 2000 people in the processing sector. However, these positive figures are very much overshadowed by the current financial crisis affecting farmers, particularly in the dairy sector, and that is my main focus at the moment.”

On the growing agri-food sector and the significant contribution it makes to our local economy Minister O’Neill added: “I have always been a champion of our agri-food sector in the north which continues to be a significant growth sector for the local economy with turnover in the food and drinks industry heading towards £5billion. Recent statistics also show an increase in employment of 5% as well as increased exports of more than 7%. Clearly, we will not continue to have a thriving food sector if we do not have a thriving farm sector and that is a challenge for us going forward.

“I have and will continue to offer my full support to the dairy sector. Having worked closely with the industry over the last the 12 months in tackling this crisis I have been inspired by their determination and hard-work. I will continue to wholeheartedly match their efforts as I fight their corner by maintaining my regular engagement with the DEFRA Secretary of State, Liz Truss, to emphasise our unique circumstances and press her to support our case for effective and timely EU action.

“In particular, I will carry on with our fight for a review of the intervention threshold rates and immediate help for the dairy sector.  And will continue to highlight the plight of other farm sectors,”she stressed.

Minister O’Neill went on to update the Assembly on what action she had already taken and the next steps.

“I met with EU Agriculture Commissioner, Phil Hogan in late March and took the opportunity to impress upon him the importance of the dairy sector for the north, our particular exposure to global market volatility and the potentially dire consequences of the growing problems in terms of milk prices.

“On September 1, I took our case to the heart of Europe, securing an unprecedented meeting with Commissioner Hogan and his senior officials. I felt reassured that Commissioner Hogan had a better grasp of our unique circumstances here, the particular vulnerability of our industry and the difficulties faced because of our high dependence on exports, poor exchange rates and extreme market conditions. I emphasised the need for immediate action to put money into farmers’ pockets and pressed him very hard on reviewing the intervention threshold.

“On a practical level, my Department’s dairy advisers have throughout the spring and summer held workshops and training events dealing with the specific issues of cost control, technical efficiency, benchmarking and business management.  I have had a number of meetings with the banks and feed merchants, to encourage them to be proactive, sympathetic and flexible as possible. I am also committed to informing farmers of their entitlements in November and making Direct Payments to as many farmers as possible in December 2015.”

Looking ahead Minister O’Neill announced that she has established a Supply Chain Forum and that she plans to open the first phase of the Farm Business Improvement Scheme later this year.

She added: “Support for knowledge transfer, innovation, cooperation and capital investment will be available under the Rural Development Programme (RDP), including the proposed Farm Business Improvement Scheme.  Following the approval of our RDP by the European Commission, I plan to open the first phase of the Farm Business Improvement Scheme measures later this year. This will include the establishment of Business Development Groups and training for farmers including farm safety and business planning, with the other schemes to follow in a co-ordinated manner.

“I am committed to supporting greater fairness, transparency and communication in the supply chain and I have tasked the Agri-Food Strategy Board Chair with developing proposals to take this forward. I am pleased that the first Supply Chain Forum event is scheduled to take place in October. I will also continue to work hard to stimulate export growth and open up new markets.”

Concluding her update Minister O’Neill said: “I remain optimistic for the future. Whilst dairy farmers are facing a very difficult time at present I believe that, with a growing world population, the longer term outlook for the industry is good. My priority now is to do all I can to ensure that the dairy industry is still in place and healthy so that it can seize those opportunities when the global markets and prices improve.”